Asian stocks have weekly rise as earnings fuel rally

BLOOMBERG

Asian stocks gained this week as corporate earnings in Japan, South Korea and Taiwan rose on the back of improved signs of global economic growth. Matsushita Electric Industrial Co and Hyundai Motor Co led the advance.

The Nikkei 225 Stock Average added 2.2 percent to 10,559.59 in the past five days, completing a 3.3 percent gain for October.

South Korea's Kospi index had its biggest monthly gain in two years. Hong Kong's Hang Seng Index rose for a seventh month, its longest stretch since 1992. Morgan Stanley Capital International Inc's Asia-Pacific Index climbed 5.7 percent last month.

"There's not too much bad news out there," said Pano Raftopoulos, who helps manage the equivalent of US$400 million at Challenger Portfolio Management Ltd in Sydney. "That's what markets need to feed on; if you get growth improving, you get profitability improving, and that's what markets want."

The MSCI Asia-Pacific Index has advanced 45 percent from its record low set on April 28. Exporters had led gains amid optimism that a US-led recovery would boost profit while kindling expansion in domestic markets.

Meanwhile, in the US, the Standard & Poor's 500 Index increased 2.1 percent for the week, while the Dow Jones Industrial Average rallied 2.3 percent and the NASDAQ Composite Index jumped 3.6 percent. The advances were the biggest since week ending Oct. 3.

The benchmark indexes completed their biggest monthly gains since at least May. The S&P 500 rose 5.5 percent and the Dow average gained 5.7 percent, for the largest increases since April.

The NASDAQ Composite Index performed the best of the three major benchmarks, rallying 8.1 percent. That's the most since May.

Japan's Matsushita Electric, the world's largest consumer-electronics maker by sales, climbed 9.6 percent this week to ¥1,449. The company, which exports 35 percent of its products, said on Tuesday that second-quarter net income surged 45 percent on higher sales of Panasonic flat-screen televisions and DVD players.

Honda Motor Co, Japan's No. 2 automaker, gained 1.2 percent to ¥4,340. The company gets about 90 percent of its operating profit from the US.

The Kospi rose 4.6 percent to 782.36 this week. It advanced 12 percent for October, its largest since November 2001.

Government reports in South Korea and Japan this week showed that industrial production in both countries gained more than some economists anticipated in September as overseas demand increased.

US reports on economic growth, consumer confidence and durable goods boosted some investors' expectations that demand for Asian-made products will increase. The US GDP grew at an annual rate of 7.2 percent in the third quarter, the biggest gain since 1984, the Commerce Department said earlier this week.